RECENT ITEMS POSTED TO THE LAO WEB SITE RELATED TO RETIREE HEALTH ISSUES

To access the entries listed below, go to http://www.lao.ca.gov/retireehealth/ . Click on the appropriate index category under “Articles by Category,” shown on the left side of the screen.

COUNTIES
Orange County union may be first in California to agree to 401(k)-style retiree health plan (10/18/07)
Los Angeles County establishes trust fund to begin addressing $20 billion liability (10/17/07)

CITIES
Police and firefighters sue Southern California city over retiree health actions (10/19/07)

PRIVATE SECTOR
Union-run fund to pick up 73 percent of GM’s $64 billion retiree health liability (10/15/07)
40 percent of AARP’s “Best Employers for Workers Over 50” offer no retiree health plan (10/14/07)
U.S. House committee looks at NFL retirees’ pension and health benefits (10/18/07)

CROSS JURISDICTION
Under new law, CalPERS prefunding trust to be available to all California public agencies (10/10/2007)
Nationwide, most local governments have no strategy on retiree health liabilities, survey finds (10/8/07)
Goldman Sachs says nationwide public sector retiree health liability tops $1 trillion (9/24/07)

STATES
Coalition targets Michigan legislators’ pay and retiree health benefits (10/9/07)
West Virginia panel rejects proposal after learning it would increase unfunded liability by $54 million (10/5/07)
Facing $14 billion liability, Pennsylvania raises retiree copays (9/29/07)
Maryland public workers union warns against cutting retiree health benefits (9/27/07)
California finance director says administration intends to propose OPEB plan in 2008 (9/21/07)

ITEMS FROM RECENT LAO REPORT ON CALIFORNIA STATE BUDGET

On October 15, the LAO released its annual report, California Spending Plan 2007-08: The Budget Act and Related Legislation. The full report is available on the LAO’s main Web site (www.lao.ca.gov). The report’s description of budget-related actions on state employee compensation and retirement, including state retiree health costs and liabilities, is available at http://www.lao.ca.gov/2007/spend_plan/spending_plan_07-08.aspx#empcomp

Highlights include:

* Overall California state retiree health costs rise 12 percent in 2007-08. Budgeted costs are now $1.1 billion (not including implicit subsidy identified in state’s GASB 45 valuation).

* For first time, Medicare Part D subsidies received by state to be used to cover part of the increase.
* Budget act includes new language to facilitate legislative oversight of CalPERS’ premium increase actions.
* CalPERS adopted 2008 premium increases that average 6.3 percent, the lowest annual increase in a decade.
* Budget includes no funds to begin addressing $48 billion of state retiree health liabilities.
* In addition to state’s $48 billion of liabilities, UC’s liabilities are over $11 billion, and local governments—including school districts—have unfunded liabilities that, in the aggregate, far exceed those of the state.

OVERVIEW OF THE PUBLIC RETIREE HEALTH ISSUE AND THE LAO WEB SITE

For an overview of the retiree health issue and prior LAO reports and presentations, go to: http://www.lao.ca.gov/retireehealth/RetOverview.aspx

SUBSCRIPTION INFORMATION AND COMMENTS

* To subscribe or unsubscribe, send a message with “Subscribe” or “Unsubscribe” in the subject heading to jason.dickerson@lao.ca.gov

* RSS feed for LAO Retiree Health Care News and Reports site: http://www.lao.ca.gov/retireehealth/RSS/RetRSS.aspx
* RSS feed for the main LAO site: http://www.lao.ca.gov/laoapp/rss/rssfeed.aspx
* Comments are welcomed. Also send comments to jason.dickerson@lao.ca.gov or contact Jason at 916-319-8361. You can also click on “Contact LAO” on the left side of the page at the LAO Retiree Health Care News and Reports site: www.lao.ca.gov/retireehealth

The Legislative Analyst’s Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the California Legislature.

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